So Saudi Arabia fiddles with Nintendo, EA and Take-Two
In addition to 7% of Nintendo, Saudi Arabia owns 5.8% of EA shares (previously held at 5.1%), while in Take-Two it has increased from 5.3% to the current 6, 8%
The ABC of economics wants an investor to diversify their investments. It's known. Imagine what can happen then to a country that lives on oil like Saudi Arabia in a historic moment like this in which the world has decided to focus on very different energy sources. It explains, at least in part, Prince Mohammed bin Salman 's sudden attraction to video games.
DOES SAUDI ARABIA WANTS NINTENDO?
Obviously, video games are just one of the many economic sectors on which the Saudis focus, who intend to invest their wealth so that it will also bear fruit in the future, in the green world we are building.
For this reason, in recent months the rumors that Saudi Arabia was ready to acquire a video game publisher had gradually become more insistent, especially after the announcement by Prince bin Salman that he had allocated almost 38 billion dollars to be used for the gaming sector. Here, according to rumors, 13 of these would have been set aside for the purchase of a leading software house.
While waiting for the Saudis to buy their software house, last year, in May '22, Saudi Arabia took an important step towards a historical label, Nintendo, coming to own 5% of it and this slice has already further expanded. Through further investments, Prince Mohammed bin Salman's Public Investment Fund (PIF) rose to 6% in January while he now owns 7.08% of shares in the House of Kyoto.
ALL SWITCH NUMBERS (ARRIVED AT THE END OF RUN?)
The boom obtained by Nintendo with its hybrid console, the Switch, may explain why Saudi Arabia has decided to focus on the label that has its IP like Super Mario and Zelda. This is despite the fact that in the fiscal year ending March 31, net income should settle at 370 billion yen, equivalent to 2.62 billion euros, a sharp decrease from the initial forecasts of 400 billion yen.
The contraction in sales of the Switch console in recent months, including the crucial Christmas period, was 21.3% to 14.9 million units, both due to the shortage of semiconductors and above all because the console would be close to saturation of the market.
For the fiscal year, estimates for the popular console should reach 18 million compared to 19 million expected last year. Downsizing also by revenue, to the extent of 5.6% to 1,600 billion yen and operating profit, to 480 billion yen from 500 billion. This despite the arrival on the market of the awaited The Legend of Zelda – Tears of the Kingdom, already considered a killer application, i.e. a title for which the console on which it runs is worth buying (but the Switch, in fact, would have reached stature).
Still driving sales of the Nintendo machine is the advantageous yen-dollar exchange. In the nine months between April and December, the Kyoto-based company reported a 5.8% decline in profit to 346 billion (2.45 billion euros) and a 1.9% decrease in turnover, despite it announced a 10% wage hike for its employees starting in April as a measure to fight inflation and continue to attract new talent to the job market.
THE SAUDI IS ALSO BETTING ON TWO AMERICANS
But Saudi Arabia is not only moving on Nintendo: the PIF has made further investments in Electronic Arts and Take-Two, buying new shares of both companies at the end of 2022.
In addition to 7% of Nintendo, Saudi Arabia now owns 5.8% of the shares of the US EA (previously they were stuck at 5.1%), mainly focused on sports simulations (from Fifa down) while it is even more the increase against Take-Two was substantial, with a leap from the previous 5.3% to the current 6.8%.
And then of course there's esports: Arab Savvy Gaming Group has announced it has invested $265 million in Chinese giant VSPO. The latest maneuver adds to the one already carried out in January 2022, when Savvy put 1.5 billion dollars on the plate for the acquisition of two large companies in the sector.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia-on-demand/cosi-larabia-saudita-giochicchia-con-nintendo-ea-e-take-two/ on Mon, 20 Feb 2023 10:15:49 +0000.